Liability insurance increase "just not on top of mind" for Enbridge, company president says
John Edwards - Credit Suisse
Have you taken on more insurance coverage in light of this rising liability, if you will, from the Michigan incident a few years ago? I think you had about $600 million or so before. Have you taken that up to, say, over $1 billion in the wake of that incident, or maybe you can talk about process there?Mark Maki - President
Yeah, we've had very modest increases in the amount of liability coverage that we have, John. It's just not top off mind. I think it's $700 million of liability. It's very, very expensive beyond that particular point. If you go back over our history, the Marshall incident was without question really a confluence of a number of very, very difficult and bad events in terms of what it cost ultimately. So we just don't see a lot of value in insuring for another Marshall, especially if you consider what the company has done in terms of the response, the capabilities that company has, the additional investment we've made in terms of new pipelines, replaced Line 6B, going to replace Line 3, the integrity program we've announced on our Line 10.
We've done a tremendous amount and we've got more work to do, as Al often highlights, at the Enbridge Inc level. So I think this is an example we're adequately insured against the risk and it is insurance. It's not mention every conceivable potential incident. It covers off what we think to be the likely incidents and then some.Steve Neyland - Vice President, Finance
And just to confirm that number, that is $700 million in the aggregate insurance liability for environmental for Enbridge Inc.John Edwards - Credit Suisse
So basically what you're saying is to cover more than that from a rate perspective, it's not cost effective to take that on?Mark Maki - President
For the company of the size of EEP and the ability to handle, I don't see any point to insuring at $1 billion or $1.2 billion or whatever you all look that.